#60 — Why communicate more with your existing investors (and how to do it efficiently)


So you raised funding. Yay! The Upside? You have new capital to be deployed to grow your company. The downside? Your company is not only yours anymore. You have partners now. While there are a huge amount of posts on how to communicate with your potential investors, there is not that much to be found on how to communicate with your *existing* investors. Still, it’s as much -if not more- important to be able to do it efficiently. You want to have happy investors, partners that are rooting for you and that will go the extra mile for you when you need them to.

Why? Well, because. ☺ If you don’t communicate efficiently they won’t feel part of the venture and they will either ignore you or, worse, fight you. Do remember that the vast majority of the early stage investors (particularly if we’re talking about Angel Investors) are motivated only partially by the potential return on the investment, 2-5 years from now. The vast majority will give you money to be part of the journey, to contribute. So here it goes the cheat-sheet of what I would have wished to know from the beginning, in 10 easy bite-sized steps. Ready?

  1. Do send a monthly recap. Seriously, do it. Startups move at warp speed, 12 weeks are like 12 months of the ‘real world’. Two key benefits here: a) you’ll give them a broad-enough but meaningful-enough perspective on what’s happening, b) you’ll give yourself a forcing function to generate relevant results in a reasonable amount of time.
  2. Short&sweet always win. For you and for them. For you: because you have more important things to do (like generate the monthly results you need like the air you breathe). For them: because they’re super busy people that very much probably made more than one investment and/or are negotiating the next ones as we speak. You both don’t have time.
  3. Be numbers-oriented. Nothing speaks louder than numbers. What are the key metrics that you’re currently tracking? How did they perform compared to the last month figure and the overall total? Where do you expect to go a month and a quarter from now? Those are the only things that matter. No bullishit stuff on 3-years projections or the easter bunny.
  4. Think actionable. Write about what you did and how it generated (or not) impact on the company. Write also about what you’re going to focus on in the next 4 weeks. Keep the analysis for yourself… also because if you need some specific advice, the email you’re composing is NOT the best way to get it (pick up the fuck*ing phone if that’s the case).
  5. Design matters. I know it’s not the obvious thing to think of, but how you visually compose your email is relevant. Use bullet points, divide the topics by area (I use five: product/tech, sales/clients, funds/corporate, press/pr, team/hr), leave some space, order things by priority. The easy on the eye it is, the higher the probability of someone reading it.
  6. Don’t use only words. Attach some multimedia content: the screenshot of the Monthly Numbers on your real-time dashboard (because you do have a real-time dashboard right?) and/or the mockups of the UI upgrade you’re going to implement in the next month and/or some videos of the team at the latest relevant event. Let them be part of the excitement.
  7. Cash Position and Burn-rate. They gave you money to make money. That’s the name of the game. How much money is in the bank? How much did you burn this month and how long are you covered? Don’t be shy about it. At some point you may need to do another round; you want them to be the first ones to follow-on after giving them a quick call.
  8. Trigger their attention. As said they’re busy, and you’re competing for their attention in their overcrowded inbox (who isn’t nowadays?). Use the subject “IMPORTANT > Monthly Investors Recap”: it will stand out. And open your email with two lines of “TL;DR” underlining the three most important things you want them to know and remember.
  9. Ask for what you need right away. For the sake of your sanity, and in the best interest of yours/theirs’ shares value, consider them a resource to tap into. But don’t force them imagine what you need by inferring 25 lines and 10 numbers, and don’t hide it at the bottom of the email. Put it on top and write “The single most important thing that we need is: etc”.
  10. You need this more than they do. Surprise, but this is the bare and ugly truth. What you write speaks capital letters on how you manage the company. How you identify the key metrics and key action items, and how you’re able to execute against your own goals to generate meaningful progress for the company. It’s all about that.

It shouldn’t take more than a couple hours of work, once that you get used to it. Bonus point if you read up to here: below you can find the ACTUAL email that a company following this approach sent to its investors in January (I just took away all the numbers and references). Enjoy!


Hey investorname!

TL;DR >> Yet another great month ;) Very satisfying growth both on the keymetric1 and on the keymetric2 side (made the daily all-time-high this month), implemented the BizModel (pricing page: linkhere) as well as a wealth of the new features, and extended the fundraising up to $xxx. The single most important thing that we need: start talking to someone very good at Saas Funnel Optimization. Know someone? Send him over!

SALES/CLIENTS

  • reached $xxxM in keymetric1 (+xxx% overall), adding $xxxk in January alone (+xxx% month-over-month).
  • reached xxx in keymetric2 (+xxx% overall), adding xxx in January alone (+xxx% month-over-month).
  • we implemented the BizModel (price page can be found xxx) deciding for a free-trial instead of freemium.
  • what’s next in Feb? keygoal1 + keygoal2 + keygoal3

PRODUCT/TECH

  • delivered keyfeature1 + keyfeature2 + keyfeature3 (the most requested features so far).
  • delivered the keyfeature4, to guide further users with no expertise through easy daily tips.
  • generated a new daily all-time-high in keyfeature1 at $xxxk + received another customer love letter (below).
  • what’s next in Feb? keygoal1 + keygoal2 + keygoal3.

FUNDS/CORPORATE

  • finalized $xxxk on the $xxxM cap CN and already have $xxxk incoming + $xxxk committed on the $xxxM cap CN.
  • having xxx different conversations to fill up the round up to $xxxM + preparing DemoDay (script here: linkhere, keynote here: linkhere).
  • expenses of Jan: $xxxk ($xxxk headcount, $xxxk non-headcount). Cash in the bank as of Jan, 31th: $xxxk.
  • what’s next in Feb? keygoal1 + keygoal2 + keygoal3.

PRESS/PR

  • we got xxx public mentions of enthusiast customers on Twitter (you can read them here: linkhere1, linkhere2, linkhere3, linkhere4, linkhere5)
  • one more Twitter mentions was from xxxxxxx, the go-to-resource for xxxxxxx (“impressed so far”! read it here: linkhere)
  • we were finally covered by xxxxxxxx as one of the companies “to watch” in the Bay Area (article here: linkhere)
  • what’s next in Feb? keygoal1 + keygoal2 + keygoal3.

TEAM/HR

  • added a xxx Dev already (based on the extended round), he as well already worked with founder1 and founder2.
  • the resulting final composition post-fundraising is currently xxx FTE (xxx developers, xxx designers, CTO, COO, CEO).
  • screened a new openposition to support founder1 in executing the Content Marketing Strategy moving forward.
  • what’s next in Feb? keygoal1 + keygoal2 + keygoal3.

FROM THE MARKET: keyarticlehere

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